ANGLO-ARGENTINE TRAMWAYS Since I wrote rather hopefully some weeks ago
of the possibilities of the 4 per cent. First Debenture stock of the Anglo-Argentine Tramways Company the price has slithered from roughly 38 to 33. Such a steep decline is due, I think, to the liquidation of over-bought positions by speculators rather than any change for the worse in the company's prospects. As I anticipated, a scheme of arrangement has been formulated to cover the period required for the new Buenos Aires Transport Board to get into its stride, and I see no reason to quarrel with the terms. Debenture holders, though they are asked to agree to an extension of the existing moratorium for a further two years, retain their prior position, and holders of the Second and Third Debentures are asked to accept a reduction in their interest rates from 41 and 5 per cent. respectively to 4 per cent. The decision to leave the nominal value of the preference and ordinary capital unchanged is obviously a policy move ; the important point is that the scheme provides for a return on the capital in the event of the company receiving its anticipated dividend on its stockholding in the new Transport Board. Here we are face to face once again with the principle of " give and take " in a reconstruction scheme. Although, in theory, the Debenture holders should not abate their claims by one jot or tittle to enable the shareholders to receive some small return, in practice they are being asked to make a small sacrifice so as to enlist the shareholders' votes. In my view, the scheme is reasonably fair and should command approval.
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